March 30, 2004 7:55 AM PST
Google hit with 'geo-location' lawsuit
Digital Envoy filed the lawsuit Monday afternoon in U.S. District Court in Atlanta, charging that Google violated a licensing agreement when it began offering ads on third-party Web sites, the lawyer representing Digital Envoy confirmed Tuesday.
Several years ago, the two companies struck a licensing agreement allowing Google to use "geo-location" technology invented and developed by Digital Envoy, said Timothy Kratz, a lawyer with the firm of McGuireWoods. The technology uses the Internet Protocol (IP) address of a computer visiting a particular Web site to determine the nearest city in order to direct specific advertisements to the computer's user.
The license allows Google to use that technology on its own site, but not on third-party sites, Kratz said. "If an advertiser is signed up under the massive AdWords program, and if its ad runs on (the Web site of) USA Today, then it's a misappropriation of our technology."
Google representative David Krane declined to comment on the matter because it is pending litigation.
Over the last several years, companies in the highly competitive and increasing lucrative search market have been building and refining their advertising efforts, looking to boost revenue and to ensure the loyalty of visitors. AdWords is one of a number of methods that Google has used to tailor its search results.
Kratz said the problem is that Google derives a significant amount of revenue from these sorts of ads on third-party sites using the technology from Norcross, Ga.-based Digital Envoy.
Google currently is paying $8,000 a month for its use of the Digital Envoy technology and offered to increase that amount by 50 percent, Kratz said. But "if they're making millions, an extra $4,000 a month isn't going to cut it," he said.
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